May 10, 2014

Detroit Mayor Mike Duggan and Police Chief James Craig arrive at a news conference April 30. Under a new 3-year city budget plan, the mayor's office and City Council would receive funding increases. / Kirthmon F. Dozier/Detroit Free Press

Detroit Free Press Staff Writer

Related Links

Detroit’s first budget under bankruptcy has the city spending less than $1 billion from its general fund in each of the next three years, according to the spending plan released Friday by emergency manager Kevyn Orr’s office.

The budget is consistent with a restructuring blueprint the city filed in U.S. Bankruptcy Court, a spokesman for Orr said. So the city’s spending plan — typically worked out between the mayor and the City Council — will be subject to the outcome of the city’s bankruptcy case.

“The budget presented is balanced and modest,” Orr spokesman Bill Nowling said. “It allows the city to provide basic public services to its residents and to make additional investments where needed.”

Many city departments will face moderate to slight budget cuts under Orr’s plan.

But the mayor’s office would be getting a bump. The office spent about $2.9 million this year. It is projected to get about $7 million in each of the next three years. The City Council’s budget also is expected to increase, from about $5.5 million this year to more than $7 million a year.

Mayor Mike Duggan will not have to approve Orr’s budget, Duggan’s spokesman said. The mayor, however, is expected to testify in bankruptcy court during hearings this summer to approve Orr’s plan of adjustment.

Although Detroit filed for bankruptcy last year, seeking relief from about $18 billion in debts and projected long-term liabilities, the city is expected to generate about $959 million in general fund revenue in the current fiscal year, which ends June 30. The budget includes a $120-million loan approved last month in bankruptcy court to help pay for city services.

This current fiscal year’s general fund spending came in at $996 million. Over the next three years, Orr’s budget calls for $937 million, $922 million and $927 million, respectively, in general fund spending.

City Council President Pro Tem George Cushingberry Jr., chairman of the council’s budget committee, said he is pleased the mayor and the emergency manager are working together. Cushingberry said he will be comparing the spending plan to the city’s previous appropriations.

The mayor typically presents the budget publicly to the City Council, setting into motion an arduous process in which the council tweaks the mayor’s plan and creates an alternative budget before a final spending plan is approved. There was no public presentation to accompany Friday’s release of the budget.

Other highlights of Orr’s plan include:

■ General fund spending on workers’ pay remains generally flat, going from $341 million this year to about $351 million in 2016-17.

■ The police and fire departments’ general fund budgets will be drastically reduced. But Orr’s budget indicates their operations will be supplemented by the $120 million from the “quality of life loan.”

■ The Police Department’s general fund budget will be $262 million next year, compared with $359 million this year. The Fire Department spent about $176 million this year but will get about $112 in general fund dollars next year.